Los Angeles daily herald., 1887-12-31

terments will amount to $4,000, 900.
Expert Colonel Morgan's report that,
considering the physical condition and
its earning capacity, the road is fairly
worth $ll0, 200, 900, and is considered
excessive and disproportionate with
cost OF reproduction, which Colonel
| Morgan fixes It about I,O0O,-
600. The statuary lien under
the case Of the United States vs..
Kansas Pacific is limited to that por-
ton of the railroad in consideration
Of which bonds are issued that is
only to read between Ogden and San
Jose. The bonded debts are figured
at $SS,000,00 The conclusion is
therefore reached that the present
mortgage given by the Central Pacific
Railroad, embracing the entire 1877
miles of railroad, would there
fore give but little additional
security TO the present statu-
tory lien, and as however the
advantage as in case CT the Union
Pacific OF placing within control of
the creditor 8 complete mortgage of
OF the entire railroad
including the California and
oregon, San Joaquin Valley,
San Francisco, Oakland and Alameda
branches. The requirements under
the PROVISIONS OF mortgage pro-
posed by the bill would be as fol-
lows: FOR the first ten years three
per cent of $4,000 900. The present
value OF the bonded debt is 81 400 900,
which, by reckoning ne-half OF / per
cent. of outstanding bonds, should
make total OF 81 200, 900, and after
the expiration OF 10 years these annual
requirements would be $l,9S0,O00
The same consideration which inf-
uenced the committee in regard to
the Union Pacific apply TO the Cen
tral Pacific. 1t is hardly to be ex-
pected that the Central Pacific will
accept any act resembling the
one proposed in the case of
the Union Pacific. The application |
OF net earnings resulting from a por-
ton of the roads subsidized would be |
insufficient to meet the accruing inter-
est, even at the reduced rate of
three per cent per annum. The re-
payment OF the present worth of the |
obligation is likewise insufficient, be-
cause the entire net earnings will not |
amount to three per cent OF the debt. |
The enforcement of the statutory
lien, either at maturity of debt or an
earlier period, would result in the |
sale, and the probable re-
suit would be, as in the |
case of compulsory sale to the
Union Pacific indebted corporation |
or to some OF its prominent officers
who would acquire'title to the road,
so that the ustimate effect would be
merely presenting to them as o gift |
the whole amount due to the Uni ed
States. The bill, therefore, sub
mitted as applicable to the Central
Pacific prepared on the same principle
as that of the Union Pacific with the
exception that if the company re-
fuses the provisions, the entire net
earnings of the subsidized road shall
be applied to the sinking fund and
interest account as directed by the
Thurman act. The financial inabil-
ity of the company to meet the re-
quirements is the result OF profigate
and wanton perversion of the COM
pany's assets in dividends, whose
aggregate amount exceeded $34, 4,000,-
600, and the extravagant contracts
persisted in to the present time was
evidenced in the case Of construction
contsacts for the Northern and Cali
fornia and Oregon railroad by the
Pacific Improvement Company, en-
tered into in OItober, 1886.
THE remainder of the majority re-
port had not been received at the
time OF going to press.-ED. HERALD |